Can an Embassy Suites franchisee transfer to a Sanctioned Person?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement ("FA"), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| return all copies of the eforea spa Manual, cancel all assumed | ||
| name or equivalent registrations and transfer any domain name | ||
| listings and registrations that contain any reference to the eforea | ||
| name to us, and cease representing yourself or the hotel as then | ||
| or formerly operating an eforea spa. | ||
| HITS Agreement 4.2 | You must stop using our software and related documents, return | |
| all copies to us, and certify to us that you have done so. | ||
| j. Assignment of contract by us | FA §12.1 | We may assign or transfer the Franchise Agreement and any of our rights, duties or assets to any person or entity without your consent so long as the assignee assumes all of our obligations to permit you to operate the Hotel. |
| HITS Agreement 2.1 | HSS may delegate its operational responsibilities under the | |
| HITS Agreement to third parties but remains responsible. | ||
| k. "Transfer" by you – definition | FA §§1 and 12.2 | Any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest, including a transfer of an interest the hotel, the Franchise Agreement, the site on which the hotel is located or any direct or indirect Equity Interest (as defined in the Franchise Agreement). You may not transfer to a Competitor or a Sanctioned Person. |
| HITS Agreement – Not applicable | Transfer is not defined in the HITS Agreement. We consider any attempt on your part to transfer or assign any of your rights or obligations under the HITS Agreement to be a "transfer" by you. | |
| l. Our approval of transfer by you | FA §12.2 | A Transfer of any interest in you, the Hotel, the Hotel Site, or the Franchise Agreement (or any rights or obligations under it) are prohibited unless expressly allowed in the Franchise Agreement. The Franchise Agreement allows 2 types of Transfers if certain conditions are satisfied: (a) Permitted Transfers; and (b) Change of Ownership Transfers. In any Transfer, the proposed Transferee may not be a San |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, a franchisee is prohibited from transferring any interest in the franchise to a Sanctioned Person. This restriction applies to any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest, including the hotel, the Franchise Agreement, the site, or any direct or indirect Equity Interest.
Embassy Suites requires adherence to this policy, and any transfer attempt involving a Sanctioned Person is not allowed. This is further reinforced by the stipulation that in any transfer, the proposed transferee may not be a Sanctioned Person.
This provision protects Embassy Suites from potential legal and reputational risks associated with doing business with individuals or entities on sanctioned lists. For a prospective franchisee, this means ensuring any potential buyer or transferee meets the franchisor's criteria and is not a Sanctioned Person, which requires due diligence in any transfer process.